Bellevue, WA · Member since 2017 · 29 posts · 4 votes
My name is Kishor and I have a full time job in seattle. I have no real estate investing experience but I find the subject extremely fascinating and viable in regards to creating greater financial independence. My goal is to acquire at least ten rental homes over the next 2-5 years and perhaps move into multi-family units sometime shortly after that.
I am eager to learn, as well as give back, and would be interested in connecting with you on best practices for getting started in this market and investment vehicle.
I am looking to flip properties in North Seattle area and would appreciate answers to the following questions:
1) East side funding has 12% and 2 points origination fees for 5 months, are they better HML in seattle area?
2) What is the typical norm for paying the selling listing agent and buyer's agent for the flip?
Lastly, I am looking to build my team and appreciate recommendations for the following
First and foremost, congratulations on getting started in Real Estate investing! You're taking the right first steps which is educating yourself and reaching out to those with experience on the subject.
You mention looking to acquire rental properties but are mentioning flips. Are you looking to start with flipping and eventually build a portfolio of rentals?
To answer you questions, i'll go through one by one.
1. Eastside Funding is the main HML in the greater Seattle area. They close on a lot of deals and have a reputation that speaks for itself. I've used them, investors I work with have used them, even a couple of developers I know have used them. As with any HML, you need to make sure your numbers, contractors and timelines are on point. While I believe ESF will hold a note for up to 12 months (don't quote me on that), you don't want to be holding something that long and paying 12% interest on the deal... you will lose profits, fast.
2. It's customary in our market that the seller pays both sides of the agent commissions. This means that when you're buying, you will not be paying the buyer's agent's commission, the seller will. When you finish the rehab and become the seller (listing the property on the market), you will likely pay the commission for both sides when a ready, willing and able buyer is found and closes on the property.
To expand on this, typically the agent who brings you the buy-side of the flip (before the rehab), would like to become the listing agent when you're ready to sell. Working in partnership with an agent who understands these types of investments can be invaluable when identifying properties. This is typically how deals are structured when investor friendly agents work with investors.
-- Team Building --
1. I'd be happy to recommend great contractors to you when ready.
2. Listing agent -- I am an investor friendly Real Estate Agent from Bellevue :)
3. HML - I've always worked with and trusted Eastside Funding. As I mentioned before, I work with plenty of investors who are either cash or finance their deals through ESF. There are other options as well (Intrust Funding, Private Lenders Group, Veristone, Seattle Funding, etc.).
4. Title Company & Escrow - Normally this is something handled by the Real Estate Agent you're working with. Each title and escrow company works a little differently, but the outcomes are the same. I typically use Fidelity or First American. I also have private law firms who I escrow through frequently as well.
5. CPA - I'd be happy to recommend a CPA to you as well.
I hope I was able to answer all of your questions for the time being. I'd be more than happy to chat with you about your goals and answer any followup questions you may have. Feel free to reach out!
First and foremost, congratulations on getting started in Real Estate investing! You're taking the right first steps which is educating yourself and reaching out to those with experience on the subject.
You mention looking to acquire rental properties but are mentioning flips. Are you looking to start with flipping and eventually build a portfolio of rentals?
To answer you questions, i'll go through one by one.
1. Eastside Funding is the main HML in the greater Seattle area. They close on a lot of deals and have a reputation that speaks for itself. I've used them, investors I work with have used them, even a couple of developers I know have used them. As with any HML, you need to make sure your numbers, contractors and timelines are on point. While I believe ESF will hold a note for up to 12 months (don't quote me on that), you don't want to be holding something that long and paying 12% interest on the deal... you will lose profits, fast.
2. It's customary in our market that the seller pays both sides of the agent commissions. This means that when you're buying, you will not be paying the buyer's agent's commission, the seller will. When you finish the rehab and become the seller (listing the property on the market), you will likely pay the commission for both sides when a ready, willing and able buyer is found and closes on the property.
To expand on this, typically the agent who brings you the buy-side of the flip (before the rehab), would like to become the listing agent when you're ready to sell. Working in partnership with an agent who understands these types of investments can be invaluable when identifying properties. This is typically how deals are structured when investor friendly agents work with investors.
-- Team Building --
1. I'd be happy to recommend great contractors to you when ready.
2. Listing agent -- I am an investor friendly Real Estate Agent from Bellevue :)
3. HML - I've always worked with and trusted Eastside Funding. As I mentioned before, I work with plenty of investors who are either cash or finance their deals through ESF. There are other options as well (Intrust Funding, Private Lenders Group, Veristone, Seattle Funding, etc.).
4. Title Company & Escrow - Normally this is something handled by the Real Estate Agent you're working with. Each title and escrow company works a little differently, but the outcomes are the same. I typically use Fidelity or First American. I also have private law firms who I escrow through frequently as well.
5. CPA - I'd be happy to recommend a CPA to you as well.
I hope I was able to answer all of your questions for the time being. I'd be more than happy to chat with you about your goals and answer any followup questions you may have. Feel free to reach out!
1) I would like to know more about the rates, ESF offers 12%, 2 points and 90 LTV, I would like to know other HMLs with better rates.
2) Yeah, I agree with that. But I am looking through channels in assignment of contracts and wholesale deals, so I am not sure if those deals pay buyer's agent commission. I am interested in properties via MLS as well.
3) Could you please pm the contact details of contractors and CPA
@Kishor Y. Saw your PM and answering you here. I don't think BP allows me to post contact info, so feel free to follow up with me over PM if you want that.
ESF is a big lender here, but there are a lot of them in this market, both local and national. "Better" is subjective when it comes to hard money and it really depends on what you value more. There's no perfect HML, but some are cheaper than others (as low as 6.8% interest or 1pt), some are faster than others (i.e. 2-3 day closing instead of 3 weeks), some are less headache than others (paperwork, underwriting, etc), some have longer loans than others (1 or 2 years instead of 5 months), some require less down payment than others (10% vs 25%), etc. So you have to decide what's more important to you, and then I can recommend someone that fits the bill. Also feel free to read my blog post on how to compare different lenders if you want more insight. I personally don't like anything less than a 9-month loan, especially in this slower market.
As @Jake Alger mentioned, sellers pay both agents. Usually both sides get 3% of the sale price. Sometimes an investor-friendly agent will discount their commission for you, but just be careful on what they're actually offering. You can get your money's worth paying 1% to the listing agent, and you can also get your money's worth paying 3%. In regards to wholesale deals, if it's off-market there isn't usually a cost for agent commission, only wholesale fees.
1) As far as GCs go, just be careful. A lot of investors don't share their best ones. Make sure you vet each GC yourself, even if another investor had a great experience with them. GCs can start good, but rarely do I see them stay good. They might lose some of their guys, take on too much work, have a rough personal that bleeds into their business, etc; all of these things can lead to them going bad.
2) There's a lot of listing agents out there... PM me if you're still looking after you get some more answers here.
3) See above.
4) I really like Sara Levien at First American Title on Stewart St in Seattle. I use her for all of my closings as much as I can.
5) Lots of options here. Mark Canton and Natalie Kolodij are a couple of active local CPAs who know their stuff when it comes to RE investing. Anderson Advisors and Mark Kohler are a couple of the big name national ones that other local investors like to use as well (although Anderson is located here in WA).
Kishor I would start with a knowledgeable real estate agent, lawyer and CPA. The figure out who all the lenders are and put yourself together one of the lenders full checklist. Then work on finding a deal, then go back to other lenders if you want to get pricing figured out. You’lll have a hard time getting anything but ranges without a live deal to get priced. (P.S. just being helpful I do not lend in Washington State)
Some great advice already here by @Jake Alger and I use Veristone, and I find them easier to work with. As was mentioned though, it really depends on your criteria. @Nghi Le
Regardless, congratulations on the decision, and good luck. Feel free to message me anytime if you'd like any help with analyzing a deal or just talking about investing.
Hi @Kishor Y., welcome to the site and the Washington real estate market! I like that you've put sometime into your goals; through you may find that you'll drift into Multifamily a little sooner. Be sure to check out some of the local REIA meet ups. Fixated on Real Estate is a good one as well as the Cascadia Investors Alliance. Both are on this site so you should be able to find then under local events.
